Pharmaceutical Contract Manufacturing Market Analysis North America, Asia, Europe, Rest of World (ROW) - US, China, India, Germany, UK - Size and Forecast 2024-2028

Pharmaceutical Contract Manufacturing Market Size 2024-2028

The pharmaceutical contract manufacturing market size is forecast to increase by USD 64.8 billion, at a CAGR of 8.1% between 2023 and 2028.

• The market is experiencing significant growth, driven by the patent expiry of numerous blockbuster drugs, leading to an increasing demand for generic drugs in the healthcare industry. This trend is further fueled by the rising number of US FDA-approved manufacturing facilities, expanding the market's capacity to cater to the surging demand. However, the market is not without challenges. Capacity utilization and constraints pose a significant hurdle, as companies grapple with balancing production demands and maintaining optimal efficiency.
• Effective capacity planning and strategic partnerships will be crucial for companies seeking to capitalize on the market's opportunities while navigating these challenges. The market's dynamics are shaped by these key drivers and obstacles, offering potential for strategic business decisions and operational planning in the pharmaceutical industry.

What will be the Size of the Pharmaceutical Contract Manufacturing Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2018-2022 and forecasts 2024-2028 - in the full report.
Request Free Sample

The market is characterized by its continuous evolution and dynamic nature. This market encompasses various sectors, including active pharmaceutical ingredient (API) synthesis, drug substance manufacturing, and drug product manufacturing. Quality by design (QbD) and analytical testing methods play integral roles in ensuring product quality and regulatory compliance. Cleanroom design and technology transfer are crucial elements in the manufacturing process, enabling seamless integration of liquid filling equipment, deviation investigation, fill-finish operations, and pharmaceutical formulation development. Supply chain management, clinical trial materials, and stability testing protocols are also essential components, requiring effective risk management systems and process analytical technology.

Biopharmaceutical manufacturing, aseptic processing, and sterile injectable manufacturing necessitate specialized technology and techniques, such as automation systems, process validation, and good manufacturing practices. Product lifecycle management, scale-up manufacturing, material sourcing, and CAPA implementation are vital aspects of the contract development manufacturing process. Drug delivery systems, packaging and labeling, and regulatory compliance are key considerations in the production and distribution of pharmaceutical products. Ongoing advancements in technology and regulatory requirements continue to shape the market landscape, ensuring a dynamic and evolving industry.

How is this Pharmaceutical Contract Manufacturing Industry segmented?

The pharmaceutical contract manufacturing industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.

• End-user
  • Big pharmaceutical companies
  • Small and medium-sized pharmaceutical companies
  • Generic pharmaceutical companies
• Service
  • API/bulk drug manufacturing
  • Final dosage form
  • Secondary packaging
• Geography
  • North America
    • US
  • Europe
    • Germany
    • UK
  • APAC
    • China
    • India
  • Rest of World (ROW)

By End-user Insights

The big pharmaceutical companies segment is estimated to witness significant growth during the forecast period.

The pharmaceutical industry's complex manufacturing requirements and capital-intensive nature have led many large pharmaceutical companies to outsource their production processes to Contract Manufacturing Organizations (CMOs). These entities specialize in active pharmaceutical ingredient synthesis, drug substance manufacturing, and drug product manufacturing. CMOs employ quality by design principles, utilizing advanced analytical testing methods and cleanroom designs for quality control testing. They also excel in biopharmaceutical manufacturing, including aseptic processing, technology transfer, and fill-finish operations. Pharmaceutical formulation development, supply chain management, and clinical trial materials production are additional services offered by CMOs. Stability testing protocols and risk management systems ensure product quality, while process analytical technology and sterile injectable manufacturing cater to the production of complex drug delivery systems.

CMOs also provide packaging and labeling services, automation systems, process validation, and regulatory compliance. Batch record review and contract development manufacturing are essential services for pharmaceutical companies during clinical trials and commercial production. Tablet compression technology, good manufacturing practices, product lifecycle management, and scale-up manufacturing are other areas where CMOs demonstrate expertise. Material sourcing, CAPA implementation, and change control management are crucial aspects of their operations. The pharmaceutical sector's increasing demand for generic drugs and biologics has further emphasized the importance of CMOs. Their ability to handle complex manufacturing processes and provide cost-effective solutions has made them indispensable partners for large pharmaceutical companies.

Request Free Sample

The Big pharmaceutical companies segment was valued at USD 56.20 billion in 2018 and showed a gradual increase during the forecast period.

Regional Analysis

Asia is estimated to contribute 45% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.

Request Free Sample

The market in North America is experiencing substantial growth due to the rising demand for cost-effective and efficient drug manufacturing solutions. Contract Manufacturing Organizations (CMOs) are playing a pivotal role in meeting the increasing need for high-quality medicines in the region. The complexity of drug development and manufacturing is a significant driver of this market's growth. In recent years, there has been a rapid increase in the number of new and innovative drugs entering the market, many of which are highly specialized and necessitate advanced manufacturing processes that are not available in-house for pharmaceutical companies.

Quality by design and analytical testing methods are essential components of the drug manufacturing process, ensuring the production of safe and effective pharmaceutical products. Cleanroom design and quality control testing are crucial for maintaining the required standards of hygiene and purity. Biopharmaceutical manufacturing, aseptic processing, and technology transfer are vital for producing complex biologics and ensuring their sterility and efficacy. Pharmaceutical formulation development, supply chain management, clinical trial materials, stability testing protocols, and risk management systems are essential for ensuring the smooth transition of drugs from the laboratory to the market. Sterile injectable manufacturing, drug delivery systems, packaging and labeling, automation systems, process validation, and regulatory compliance are all critical aspects of the pharmaceutical manufacturing process.

Contract development manufacturing, tablet compression technology, good manufacturing practices, product lifecycle management, scale-up manufacturing, material sourcing, CAPA implementation, and change control management are all essential elements of the market. The market's evolution is characterized by a focus on innovation, efficiency, and regulatory compliance.

Market Dynamics

Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.

What are the key market drivers leading to the rise in the adoption of Pharmaceutical Contract Manufacturing Industry?

• The expiration of patents and the resulting rise in demand for generic drugs serve as the primary market drivers.

• The market experiences continuous growth due to several key factors. The increasing demand for cost-effective alternatives to branded drugs, driven by the need to reduce healthcare expenses, is a significant factor. Governments worldwide promote the use of generic medications to achieve this goal. In 2023, approximately 51 patents covering over 150 pharmaceutical products are set to expire in emerging markets like South Korea, leading to increased competition and affordability. Although this patent cliff may result in income and volume losses for branded drug manufacturers, it provides an opportunity for multiple generic equivalents to enter the market, ultimately boosting overall drug sales.
• Moreover, advancements in technology and regulatory requirements, such as quality by design, analytical testing methods, cleanroom design, and quality control testing, are essential in drug substance synthesis and drug product manufacturing. These technologies are increasingly adopted in biopharmaceutical manufacturing, including aseptic processing, to ensure product safety and efficacy. The market's growth is further fueled by the global trend towards outsourcing pharmaceutical manufacturing to contract manufacturing organizations (CMOs) to minimize operational costs and improve efficiency.

What are the market trends shaping the Pharmaceutical Contract Manufacturing Industry?

• The approval of an increasing number of manufacturing facilities by the US Food and Drug Administration (FDA) represents a significant market trend. This trend underscores the industry's commitment to regulatory compliance and innovation.

• The market is experiencing significant growth, particularly in emerging economies where the number of US FDA-approved facilities is increasing. India and China are leading this trend, with India hosting approximately 400 such facilities. This makes it a popular choice for outsourcing pharmaceutical manufacturing services. India boasts around 230 approved API facilities and 150 FDA facilities, the highest number in the world. Additionally, it ranks second for formulation facilities, with about 147. The approval of manufacturing facilities in countries like China, India, Mexico, and Brazil is on the rise, contributing to market expansion.
• Technology transfer, liquid filling equipment, deviation investigation, fill-finish operations, pharmaceutical formulation development, supply chain management, clinical trial materials, stability testing protocols, and risk management systems are crucial aspects of this market. These elements ensure the production of high-quality pharmaceuticals while maintaining regulatory compliance.

What challenges does the Pharmaceutical Contract Manufacturing Industry face during its growth?

• Capacity utilization and constraints pose a significant challenge to the growth of the industry, as maximizing production while adhering to limitations on resources and efficiency is a critical aspect of maintaining competitiveness and profitability.

• The market is currently challenged by capacity utilization constraints, impacting the production of various therapeutics, particularly biological drugs. These constraints, which include time, cost, and resources, affect approximately 35% of contract manufacturing organizations (CMOs) during at least one stage of the manufacturing process. Moreover, 20% of CMOs encounter moderate to major constraints throughout the process. These manufacturing issues hinder CMOs from reaching their full production potential, leading to delays in the launch of numerous therapeutics. Process analytical technology, automation systems, process validation, regulatory compliance, batch record review, contract development manufacturing, sterile injectable manufacturing, and drug delivery systems are crucial aspects of pharmaceutical manufacturing.
• Ensuring the effective implementation of these elements is essential for overcoming capacity utilization constraints and enhancing overall efficiency in the manufacturing process. By focusing on these areas, CMOs can optimize their operations, improve productivity, and ultimately, bring high-quality therapeutics to market more efficiently.

Exclusive Customer Landscape

The pharmaceutical contract manufacturing market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the pharmaceutical contract manufacturing market report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.

Customer Landscape

Key Companies & Market Insights

Companies are implementing various strategies, such as strategic alliances, pharmaceutical contract manufacturing market forecast, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the industry.

AbbVie Inc. - This company specializes in pharmaceutical contract manufacturing, providing services including diagnostic testing, active pharmaceutical ingredient production, and pharmaceutical development.

The industry research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:

• AbbVie Inc.
• Almac Group Ltd.
• Baxter International Inc.
• Boehringer Ingelheim International GmbH
• Cadila Pharmaceuticals Ltd.
• Charles River Laboratories International Inc.
• Cmic Holdings Co. Ltd
• Dalton Pharma Services
• Dr Reddys Laboratories Ltd.
• Grifols SA
• Laboratory Corp. of America Holdings
• Lonza Group Ltd.
• Lupin Ltd.
• Novotech Health Holdings
• OPTIMAPHARM d.o.o.
• Parexel International Corp.
• PCI Pharma Services
• Recipharm AB
• Syneos Health Inc.
• Thermo Fisher Scientific Inc.

Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key industry players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.

Recent Development and News in Pharmaceutical Contract Manufacturing Market

• In January 2024, Lonza, a leading pharmaceutical contract manufacturing organization (CMO), announced the expansion of its Vispodyl manufacturing site in Switzerland. This expansion aimed to increase the production capacity of its differentiated bioconjugate technology, used in the manufacturing of monoclonal antibodies (mAbs) and antibody-drug conjugates (ADCs) (Lonza Press Release, 2024).
• In March 2024, Thermo Fisher Scientific and Patheon, a part of Thermo Fisher Scientific, entered into a strategic partnership with Biocon, an Indian biotech company. This collaboration was aimed at expanding Patheon's biologics manufacturing capabilities and Biocon's global reach (Thermo Fisher Scientific Press Release, 2024).
• In May 2025, Catalent, a global leader in pharmaceutical and biopharmaceutical services, completed the acquisition of Paragon Bioservices, a clinical and commercial-scale gene therapy manufacturing organization. This acquisition significantly expanded Catalent's gene therapy manufacturing capabilities and market presence (Catalent Press Release, 2025).
• In the same month, the European Medicines Agency (EMA) approved a new manufacturing site for Hovid Berhad, a Malaysian pharmaceutical company, for the production of sterile injectables. This approval marked a significant step forward for Hovid in its efforts to expand its manufacturing capabilities and enter the European market (EMA Press Release, 2025).

Research Analyst Overview

• The market encompasses various processes, including lyophilization, tablet coating, capsule filling, and continuous manufacturing. These techniques require stringent quality control measures, such as personnel training, material characterization, and process optimization. Pharmaceutical packaging plays a crucial role in ensuring supply chain security and product integrity. Quality assurance systems mandate regular quality control audits, regulatory submissions, and equipment qualification. Environmental monitoring, cleanroom validation, and data integrity management are essential components of maintaining GMP compliance.
• Process simulation and manufacturing execution systems facilitate optimization and streamline operations. Single-use technology, sterile compounding, drug stability studies, and contract manufacturing agreements are key aspects of the market, which prioritizes innovation and efficiency. Regulatory requirements necessitate extensive technical documentation and a validation master plan.

Dive into Technavio's robust research methodology, blending expert interviews, extensive data synthesis, and validated models for unparalleled Pharmaceutical Contract Manufacturing Market insights. See full methodology.

Request Free Sample

What are the Key Data Covered in this Pharmaceutical Contract Manufacturing Market Research and Growth Report?

• CAGR of the Pharmaceutical Contract Manufacturing industry during the forecast period
• Detailed information on factors that will drive the growth and forecasting between 2024 and 2028
• Precise estimation of the size of the market and its contribution of the industry in focus to the parent market
• Accurate predictions about upcoming growth and trends and changes in consumer behaviour
• Growth of the market across North America, Asia, Europe, and Rest of World (ROW)
• Thorough analysis of the market's competitive landscape and detailed information about companies
• Comprehensive analysis of factors that will challenge the pharmaceutical contract manufacturing market growth of industry companies

We can help! Our analysts can customize this pharmaceutical contract manufacturing market research report to meet your requirements.

Get in touch